Some interesting data I came across regarding Motorbike sales from the FCAI, who are the peak body for Australia’s automotive industry.
“A total of 47,929 motorcycles, scooters and Off Road Vehicles (ORVs) were sold from January to the end of June 2022. This represents a decrease of 14.2 per cent on 2021 figures, which is 7,911 fewer vehicles sold.
Road motorcycles grew by 4.8 per cent on 2021 figures and scooters grew by 11.4 per cent. However, off-road motorcycles and off-road vehicles declined”.
A majority of the sales reductions came in the ORV section…”this follows a decision by the major ATV brands to stop importing ATVs into Australia due to safety concerns with the new quad bike standard”. FCAI
MTOs recent revenue numbers (below) suggests they are well positioned to take advantage of an increase in road motorcycle sales.
”New motorcycle unit sales increased 6% to 14,039 units in FY22, compared to a national market increase of approximately 4%. New motorcycle revenue increased 7% to $182.7 million and gross profit also increased 6% to $21.9 million”. MTO Results 29/8/22.
I have taken a small stake in my IRL. I see the potential for good growth when taking a medium to long term view as I like the fact they not only sell the top 10 brands, but that they sell both new and used cycles, which has allowed them to mitigate supply chain issues related to new bikes. Added to this they continue to build out their service and parts arm and along with an insurance arm they are looking to provide a one stop shop for purchases.
In the recent results Managing Director and CEO David Ahmet made note ‘that there could be subdued buying conditions ahead but they continue to execute their growth strategy (acquiring new dealerships), whilst continuing to look at entering industry segments they don’t operate in and also seek to diversify their product range’.
In what seems like a fragmented industry MTO which is profitable seems to be in a position to continue to purchase additional dealerships. If they can continue to grow and build out their network I can see MTO being a much larger business in years to come even if the next year may be a little subdued.
